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Dec 31, 2020
Altria Q4 2020 Earnings Report
Altria's Q4 2020 results were released, demonstrating resilience in its tobacco businesses amidst the COVID-19 pandemic, with progress made towards transitioning adult smokers to non-combustible products.
Key Takeaways
Altria reported a net revenue increase of 4.9% to $6.304 billion and a diluted EPS of $1.03 for Q4 2020. The company is focusing on accelerating investments to support its 10-year vision and expects full-year adjusted diluted EPS to grow by 3% to 6% in 2021.
Net revenues increased by 4.9% driven by higher revenues in the smokeable products segment.
Reported diluted EPS increased 100%+ to $1.03, driven by 2019 impairment of JUUL equity securities and higher reported OCI in the smokeable products and oral tobacco products segments.
Adjusted diluted EPS decreased 2.0% to $0.99, driven by adjusted losses in the all other category and lower adjusted earnings from Altria’s investment in ABI.
A new $2 billion share repurchase program was authorized, expected to be completed by June 30, 2022.
Revenue by Segment
Forward Guidance
Altria expects its 2021 full-year adjusted diluted EPS to be in a range of $4.49 to $4.62, representing a growth rate of 3% to 6% from an adjusted diluted EPS base of $4.36 in 2020.
Positive Outlook
- Planned marketplace investments to expand the availability and awareness of Altria’s noncombustible products.
- Costs associated with building an industry-leading consumer engagement platform that enhances data collection and insights in support of ATC conversion to noncombustible products.
- Increased noncombustible product research and development expense.
- 2021 adjusted diluted EPS growth to come in the last three quarters of the year, primarily due to prior year comparisons, including one fewer shipping day for the smokeable products segment in the first quarter.
- 2021 full-year adjusted effective tax rate will be in a range of 24.5% to 25.5%.
Challenges Ahead
- Conditions related to unemployment rates.
- Conditions related to fiscal stimulus.
- Conditions related to ATC dynamics, including stay-at-home practices, disposable income, purchasing patterns and adoption of noncombustible products.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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